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ESI Special Topics, April 2007
Citing URL: http://www.esi-topics.com/erf/2007/april07-OdedGalor.html

From •>>April 2007

Oded Galor answers a few questions about this month's emerging research front in the field of Economics & Business.


Economics & Business
Article: Natural selection and the origin of economic growth
Authors: Galor, O;Moav, O
Journal: QUART J ECON, 117 (4): 1133-1191, NOV 2002
Addresses:
Brown Univ, Providence, RI 02912 USA.
Brown Univ, Providence, RI 02912 USA.
Hebrew Univ Jerusalem, IL-91905 Jerusalem, Israel.


ST:  Why do you think your paper is highly cited?

This paper was the first to develop an evolutionary growth theory that captures the dynamic interaction between the process of economic development and human evolution, thus paving the way for the study of this important interaction.

The theory advances an innovative hypothesis which suggests that the struggle for survival that had characterized most of human existence generated an evolutionary advantage to those human traits that were complementary to the growth process, thus triggering the takeoff from an epoch of stagnation to one of sustained economic growth.

ST:  Does it describe a new discovery, methodology, or synthesis of knowledge?


“...this research generates new hypotheses about the origin of modern economic growth. In particular, the research advances the hypothesis that there are biological origins for the Industrial Revolution.”

As stated above, this research generates new hypotheses about the origin of modern economic growth. In particular, the research advances the hypothesis that there are biological origins for the Industrial Revolution. Additionally, this research promotes a new analytical methodology—a hybrid between Darwinian methodology and that of unified growth theory—that permits exploration of the dynamic reciprocal interaction between the evolution of the distribution of genetic traits and the process of economic development.

ST:  Could you summarize the significance of your paper in layman’s terms?

This research develops an evolutionary growth theory about the interplay between the evolution of mankind and economic growth since the emergence of the human species. For the major part of human existence mankind was engaged in a persistent struggle for existence. Diminishing returns to labor, along with a positive effect of the standard of living on population growth, held income per capita near subsistence level. Improvements to the technological environment or in the availability of land led to larger but not wealthier populations.

This pressure to adapt to changing environments, conceivably affected the composition of the population as well. Over time, the lineages of individuals whose characteristics were complementary to the changing technological environment gained an evolutionary advantage. They generated higher income, devoted more resources to child rearing, and their fraction within the population gradually rose.

The Agricultural Revolution and the establishment of individual, rather than tribal, property rights expedited the selection process and gradually increased the representation of individuals whose characteristics were complementary to the growth process, thus triggering positive feedback between technological progress and education and ultimately bringing about the Industrial Revolution and a period of sustained economic growth. 

ST:  How did you become involved in this research, and were there any obstacles along the way?

In the past decade I have been engaged in the advancement of unified growth theory. The discrepancy between the predictions of growth models and the process of development over most of human history stimulated me to advance an alternative theory that would capture, in a single unified framework, the contemporary era of sustained economic growth, the epoch of Malthusian stagnation that had characterized most of the process of development, and the fundamental forces driving the recent transition between these distinct regimes.

The advancement of unified growth theory was fueled by the conviction that the understanding of the contemporary growth process would be limited and distorted unless it would be based on micro-foundations that would reflect the qualitative aspects of the entire growth process. In particular, the hurdles faced by less developed economies in reaching a state of sustained economic growth would remain obscured unless the origins of the transition of the currently developed economies into a state of sustained economic growth would be identified, and their implications would be modified in order to account for the additional economic forces faced by less developed economies in an interdependent world.

Unified growth theory suggests that the transition from stagnation to growth is an inevitable outcome of the process of development. The inherent Malthusian interaction between the level of technology and the size and the composition of the population accelerated the pace of technological progress, and ultimately raised the importance of human capital in the production process.

The rise in the demand for human capital in the second phase of industrialization, and its impact on the formation of human capital as well as on the onset of the demographic transition, brought about significant technological advancements along with a reduction in fertility rates and population growth, enabling economies to convert a larger share of the fruits of factor accumulation and technological progress into growth of income per capita, paving the way for the emergence of sustained economic growth.

The underlying assumption in my "unified growth theory" was that the composition of human traits remains stationary over time. However, it has became apparent to Omer Moav and myself that, since for the major part of human existence mankind was subjected to a persistent struggle for existence, survival and reproductive success could not have been random, and thus environmental pressure must have affected the composition of human traits.

This research was hailed by some for its creative hypothesis and the incorporation of Darwinian Methodology into the field of economic growth. Consequently it was published as the lead article in the prestigious Quarterly Journal of Economics. Nevertheless, it was met with opposition by some who have argued that the time period between the Neolithic Revolution and the Industrial Revolution (i.e., 10,000 years) is insufficient for significant evolutionary changes to have taken place. However, recent evidence of rapid evolutionary processes in the human population since the Neolithic Revolution further eroded the ground beneath these objections.

ST:  Are there any social or political implications for your research?

The exploration of the reciprocal interaction between the process of economic development and human evolution is likely to revolutionize our understanding of both processes. In particular, understating the effect of the differential timing of the Neolithic Revolution on the evolution of life expectancy would generate important policy implications within the context of the vulnerability to both infectious and non-infectious diseases across countries and ethnic groups.End

Oded Galor
Professor of Economics
Research Associate of the Population and Training Center
Brown University
Providence, RI, USA

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ESI Special Topics, April 2007
Citing URL: http://www.esi-topics.com/erf/2007/april07-OdedGalor.html

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